American software company Ebix has acquired Yatra for an enterprise value of $337.8 million (₹2,323.6 crore) in an all-stock deal, the companies announced on July 17. Yatra will continue to operate independently and will retain its brand, as per Mint. In a call with investors, Ebix CEO Robin Raina said that the acquisition would help the company become the largest enterprise financial exchange in the Asian subcontinent. Ebix said it’s targeting revenue between $145-$150 million a quarter by the end of 2019. Ebix aims to launch an IPO in India in Q2 of FY2019.
What the merger will do
Raina said that the merger:
- will give Ebix “tremendous” purchase power with your providers
- will give Ebix tremendous purchase power with the tourism departments of countries. “… travel companies do well on they get tourism department of various countries to provide subsidized some of our marketing providing us hard dollars [sic]”
- puts Ebix in a “strong position from a perspective of cross-selling opportunities which no other travel provider over any other player, since Ebix has presence in Forex, prepaid cards, and MICE”.
Ebix wants to be a one-shop-stop travel service provider
Raina spoke about Ebix providing a one-stop-shop, single-window approach for all services required around travel:
We would be the only provider who would be able to say, look, if you want to fly, let’s say, from Mumbai to Rome, we’re the only one who will say, look, I’ll get you the visa. I’ll be able to get you the visa. I will [inaudible] get you an airline. I’ll get you the cab here. I’ll get you health insurance. I’ll get you travel insurance. I’ll possibly provide you hotel insurance. And, incidentally, I will get you the forex card for 82 countries or 83 countries that you could travel across, hand over your foreign currency in whichever form you need. And, incidentally, you know, take up the airline, hotel, the traditional stuff and also take care of rental cars and cars and everything.
Ebix’s IPO will be worth ‘a few billion dollars’
According to Raina, the EbixCash IPO will be worth “a few billion dollars” and he’d be very disappointed if the IPO valuation is $2 billion, since that would be a very low valuation.
From the IPO perspective in India, “there hasn’t been a company in India with the financial metrics that we would like to bring from a perspective of the software — financial software industry, or the insurance software industry, or the travel software industry. We will be the largest — most profitable player in the market”.
Joint venture with BSE
In Ebix’s joint venture with BSE to create an insurance exchange, Raina said that the company has created the technology backbone and launched a number of lines and made them really work with respect to interfacing our distribution exchange with 20-plus insurance carriers. “Our goal is that, within minutes, we want a consumer to be sitting in any remote corner of India in the last mile of India and be able to buy insurance and ((inaudible)) the insurance policy, within minutes, while the Ebix BSC exchange would act as an in between non-aligned exchange, allowing that consumer to get competitive pricing from a number of carriers and making all that work.” The company is awaiting IRDA approval for this platform.